Erskine Bowles, co-chairman of President Obama's deficit-reduction commission, has said he supports an age increase for Medicare eligibility. / J. Scott Applewhite, AP

by Kelly Kennedy, USA TODAY

by Kelly Kennedy, USA TODAY

WASHINGTON -- Democrats and Republicans agree the solution to the nation's out-of-control health care spending won't be wrapped up with a "fiscal cliff" bargain and short-term spending cuts.

"There are a lot of conservatives and a lot of centrists and lot of progressives who believe we need comprehensive reform," said Robert Moffit, Medicare expert for the Heritage Foundation, a conservative think tank. "Medicare's long-term debt is $37 trillion -- that's not going to be solved in the next three weeks dealing with the fiscal cliff."

But that's where the similarities end.

As things stand, federal health care spending will increase from 5% of the gross domestic product now to almost 10% in 2037, and continue to grow from there, according to the Congressional Budget Office (CBO). That's in part because health care costs overall are increasing, and because Baby Boomers are starting to hit Medicare age.

When it comes to the details of reducing long-term spending on Medicare, which cost an estimated $560 billion this year, Republican proposals that seem simple enough can cause unseen problems while those promoted by Democrats, including those in the 2010 health care law, are often hard to quantify. And one provision of the law aimed directly at curbing higher Medicare costs â?? the Independent Payment Advisory Board â?? has been under constant attack by Republicans as a form of health care rationing.

"People have these narrow budget blinders on and they miss the big picture of lowering health care costs," said David Certner, legislative policy director for AARP. "It's better for the federal government in the short-term, but it's worse for everybody else."

Medicare eligibility age

During last year's debt ceiling crisis, Republicans and the Obama administration seemed close to some kind of agreement to raise the age of eligibility for Medicare from 65 to 67. Erskine Bowles, co-chairman of Obama's deficit-reduction commission, also said he supported an age increase.

The president's re-election and the Supreme Court decision in June upholding the health care law mean the law and its provisions will remain in place. Seniors who would have to wait until age 67 for Medicare will now have the ability to buy health insurance.

Moffit said the age should be raised higher, to 68, which would save $244 billion over 10 years.

"The liberals are saying that's going to create some kind of crisis -- increasing the age over 10 years to 67," Moffit said. "I don't believe that. It's a pretty gradual change."

Premiums could go up for some people, said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, a non-partisan think tank, but not astronomically.

"The fact that the government would save money makes it a good idea," Goldwein said.

While increasing the eligibility provides clear cost savings on paper, it may also shift costs without working to contain them elsewhere in Medicare and the health care system overall, said Tricia Neuman, senior vice president for the Kaiser Family Foundation.

Raising the age also means younger and healthier seniors will be removed from the Medicare pool, Certner said, which will increase premiums for those remaining the program. The seniors between 65 and 67, who would then be outside Medicare, would be the most expensive consumers in any private insurance pool, he said, which would increase those premiums.

Changes in delivery system

Harder to determine are changes built into the health care law that change how health care providers are paid, how they use generic drugs and focus on what is called evidence-based medicine for drugs and procedures.

The appeal to these proposals is obvious. If they work, the rest of the health care system could follow suit and drive down overall costs.

But there's a problem.

"We know these things will save money, but we don't necessarily get a score from the Congressional Budget Office," Certner said. The CBO reviews legislative proposals and then issues a "score" that projects how much the plan would cost or save the government.

The Center for American Progress, a liberal think tank, has recommended competitive bidding in all areas, including medical equipment and devices -- which has been called for by both sides and fought by lobbyists in those industries. It has also proposed selling tiered products in state health exchanges that give consumers more choices but also allow the government to encourage high-value health options; simplifying administrative systems; and requiring providers to make prices available.

"Three hundred and eighty-five billion is a lot of money," said Neera Tanden, president of the Center for American Progress. "A lot of our friends think this is too much. I want to emphasize this is the ceiling."

IPAB still a target

One part of the health care law that was created specifically to save money remains a target of Republicans during the fiscal cliff debate â?? the Independent Payment Advisory Board (IPAB). Neuman of the Kaiser Family Foundation said one proposal being discussed would bring the board into play earlier than now allowed in the health care law. Beginning in 2013, IPAB must present proposals to save money if projected spending goes above a certain amount. Medicare is not expected to hit that amount until 2021, based on estimates from the CBO.

Last month, House Majority Leader Eric Cantor, R-Va., again vowed to repeal IPAB, calling it a "rationing" board, even though the law specifically prohibits the board from cutting care to seniors. The board is required to cut Medicare spending when its budget is too high. It is not allowed to determine what kind of care a person receives. Congress can vote to reverse the board's decisions if they can save the same amount of money with another plan. The CBO determined that getting rid of the board would cost $3.1 billion over the next 10 years.

IPAB does not cut or ration services, said Mark Ubel, professor of business administration and medicine at Duke University. Instead, it reduces payments to providers when Medicare goes over budget.

"The death panel myth has persisted for two years now, even though it's been called the 'lie of the year,'" Ubel said. "But anybody who works really hard at cutting or saving money is at risk politically."

He said if there were a better idea out there, the IPAB would be irrelevant.

"There aren't enough good ideas yet," he said. "And, more importantly, there's not a lot of political will."

Goldwein suggested waste-cutting measures, such as making sure providers aren't overpaid or asking those who make the most money to pay more, as has been suggested by both Democrats and Republicans.

He said both the left and the right were putting out good proposals.

"We're moving beyond politics to bipartisan support," he said. "I think that a lot of what they agree to this year can lead to substantial progress next year."